NetEase Games may be preparing to shutter even more of its overseas studios as part of an ongoing cost-cutting initiative, according to new reports. While the company is actively seeking buyers for several of its subsidiaries, more than a dozen developers could face closure if no deals are made.
NetEase Restructuring Following Disappointing Financial Results
Despite reporting a 1.5% year-over-year revenue increase in Q4 2024, NetEase also saw a 2.6% drop in gross profit, missing analyst expectations. Following these results, reports emerged that the company nearly canceled Marvel Rivals and had begun scaling back its foreign game development operations. This downsizing is said to be driven by CEO William Ding, who reportedly wants to refocus NetEase’s resources on a smaller, more manageable portfolio.
Thus far, only a few studios have been affected, but recent reports suggest that many more could follow. Game File’s Stephen Totilo states that NetEase is “actively shopping around” multiple studios, including both newly established teams and more well-known developers such as Heavy Rain studio Quantic Dream.
Over a Dozen Studios at Risk
If the company fails to secure buyers, several studios may shut down before releasing a single game. Many of these studios were launched after 2022 and led by industry veterans with experience in major franchises. For example, Resident Evil producer Hiroyuki Kobayashi was placed in charge of GPTRACK50, while Mass Effect writer Mac Walters led Worlds Untold. However, with operations at Worlds Untold already paused since November 2024, the future of these teams looks uncertain.
Here are some of the NetEase-owned studios reportedly at risk:
- Anchor Point Studios (Spain)
- Bad Brain Game Studios (Canada)
- BulletFarm (California, U.S.)
- Fantastic Pixel Castle (U.S.)
- GPTRACK50 Studios (Japan)
- Grasshopper Manufacture (Japan)
- Jackalyptic (Texas, U.S.)
- Jar of Sparks (Washington, U.S.) – Paused operations (Jan. 2025)
- Liquid Swords (Sweden) – Underwent layoffs (Feb. 2025)
- Nagoshi Studio (Japan) – Lost marketing budget
- NetEase Games Montreal (Canada)
- Quantic Dream (France)
- Rebel Wolves (Poland) – Partially owned by NetEase
- Skybox Labs (Canada)
- Studio Flare (Japan)
- T-Minus Zero Entertainment (Texas, U.S.)
- Worlds Untold (Canada) – Paused operations (Nov. 2024)
NetEase has also reduced investment in some of its minority-owned ventures but has not yet indicated whether those will be impacted.
Uncertainty Over Future Closures
NetEase has already paused operations at multiple studios and may continue shutting down others if buyers are not found. The timeline for these decisions remains unclear, but given the company’s recent actions, further downsizing seems likely.
